TOKYO, Oct 18: Japan’s Nikkei stock average was little changed on Friday as investors awaited key Chinese data due later in the morning and as they pondered the impact of the U.S. Government shutdown on the world’s largest economy.
The Nikkei was almost flat at 14,588.65, not far from a three-week high of 14,664.22 hit the previous day. The benchmark rose on Thursday for the seventh straight day, its longest such run in 7-1/2 months.
On the week, the Nikkei was up 1.3 percent and on track for a second consecutive week of gains.
Democrats and Republicans in Washington reached an 11th-hour agreement to break an impasse over the debt ceiling, pulling the U.S. Economy from the brink of an historic default as the deal funds the government until Jan. 15 and raises the borrowing limit through to Feb. 7.
‘It’s still too early to* tell what lasting impact that might have on sentiment,’ Stefan Worrall, director of equity cash sales at Credit Suisse in Tokyo, said of the U.S. Debt ceiling debacle.
‘There is no question that the shutdown in the U.S. Will have an impact on data, but how much and how long will that be? Because people can’t categorically make that judgement … It will keep the assessment of macro fundamentals difficult.’
Now that a last-minute budget deal has been reached in Washington, investors are focusing on the upcoming corporate earnings season, which gets into gear next week, Worrall added.
Analysts said many Japanese companies were expected to post upbeat earnings or raise their annual earnings projections.
‘With interim earnings announcements getting underway, we anticipate favorable results overall and upward revisions to full-year guidance,’ Goldman Sachs wrote in a note to clients last week.
Traders are also looking for leads from a batch of Chinese economic data, which should shed light on the economic health of the world’s second-largest economy. Beijing is due to release third-quarter GDP growth, September data for industrial output and others at 0200 GMT.
The broader Topix added 0.1 percent to 1,207.33 in relatively light trade, with volume at 28.5 percent of its full daily average for the past 90 trading days.
Olympus Corp rose 1.6 percent after the Nikkei business daily said the company was likely to log a group operating profit of around 30 billion yen ($306.86 million)for the April-September half, up about 70 percent on the year.
Real estate stocks were also in demand. The sector subindex gained 1.7 percent to become the best performer on Topix.
(agencies)
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